Decision to deal thrusts low-key exec in spotlight

Prosecutors score a coup with ex-accountant's insider status

TOM FOWLER, Copyright 2005 Houston Chronicle |
December 29, 2005

Richard Causey was the first name on the indictment at the center of next month's massive Enron trial, but the last name on the minds of most people.

Until now.

The former chief accounting officer's agreement Wednesday to cooperate with the government in its case against former CEO Jeff Skilling and former Chairman Ken Lay puts him in the spotlight as a potential witness against his former bosses.

Causey, 45, will bring to the government's case the insider's knowledge expected of former CFO and cooperating witness Andrew Fastow, but not the prickly personality.

Quite the contrary, Causey has been called a consensus builder at work, gentlemanly to neighbors and an all-around nice guy.

"I always thought he was a straight-shooting guy, an intelligent person, and a great boss," said Alberto Gude, the former head of corporate technology at Enron who reported directly to Causey. "I don't have any doubt in my mind he would push the envelope on some things, but it's hard to think he would cross the line. He was a very careful, measured person."

Those very qualities that make him a good potential witness may also be a weakness if he takes the stand. Attorneys for his former co-defendants will likely paint him as someone who caved in to government pressure even though he didn't break the law.

Causey's neighbor in The Woodlands, Steve Huey, provided a similar description.

The topic of a plea deal didn't come up during the Christmas Eve dinner the two families shared, but Huey said he doesn't think Causey ever thought he committed a crime

"I think he didn't feel like there was a reason to cut a deal before now," Huey said. But with the trial pending and the threat of significant jail time, Causey must have decided to act, Huey said.

"Being a family man I think he was just trying to protect his family."

Roots in the area

Causey was born in Houston in 1960 and has lived here most of his life. He was one of three children in a family living in southwest Houston before moving to Connecticut in middle school. While he was in high school, his family returned to Houston, where he went to Lee High School.

He majored in accounting at the University of Texas where met his future wife, Elizabeth. He graduated with high honors in 1982 and went to work for accounting firm Arthur Andersen, while she went to work for Ernst & Young.

A former neighbor of Causey in the Copperfield area in northwest Harris County described the Causeys as "very modest people" who between them drove an old Volvo and a small four-door sedan. They would host a Christmas open house for the neighborhood every year and arrange block parties in the spring. They moved to The Woodlands in the 1990s.

Causey joined Enron Gas Services in 1991, a division run by Skilling. He quickly rose from assistant controller to a vice president and on up through the ranks as one of a cadre of managers close to Skilling. He had a brief stint as head of the company's retail energy business before becoming CAO in 1998.

In a short appearance in a video taken in 1996 to honor the departure of then Enron CEO Richard Kinder, Causey appears relaxed and jovial as he makes a rather unfortunate accounting joke.

"I've been on the job for a week managing earnings, and it's easier than I thought it would be," Causey jokes, referring to a practice that is frowned upon by securities regulators. "I can't even count fast enough with the earnings rolling in."

After Skilling left the company in the summer of 2001, Lay mentioned Causey as one of several possible internal candidates to take on the CEO post, along with Fastow.

He was fired in 2002, however, shortly after an internal investigation conducted by the company's board of directors concluded he oversaw accounting transactions at the company that "went well beyond the aggressive."

"The fact that these judgments were, in most if not all cases, made with the concurrence of Andersen is a significant, though not entirely exonerating, fact," the report said.

He was also cited for failing to properly oversee the transactions between Enron and Fastow's partnerships, even though he was one of several executives assigned to watch the deals.

Loyal, meticulous

Former co-workers describe Causey as friendly and capable, the kind of person who tried to reach consensus instead of forcing decisions.

They also note he was always loyal to both his alma maters, UT and Andersen.

He's been known to sit through rain storms to the bitter end of losing Texas football games in Austin.

He was also religious about passing every transaction at Enron by the Andersen audit team for its blessing.

"Causey wouldn't do a damn thing without telling Skilling and Andersen," said one former executive who reported to Causey and asked that his name not be used for fear of retribution.

That's what made the so-called "global galactic" agreement, which some have called the most damning evidence against him, so out of character to those who knew him.

The global galactic agreement is a handwritten document that prosecutors allege Causey and Fastow made outlining side deals that allegedly assured Fastow's private partnerships wouldn't lose money in their dealings with Enron.

Simply having a side-deal would undermine any legal accounting for the deals, and actually documenting such deals would have been ridiculous, said observers.

What would make a careful accountant hand-write something that would essentially guarantee jail time?

The former colleague said he thinks Causey simply got in too deep.

Throughout the ups and downs of Enron, Huey said the Causeys have changed little.